Wednesday, February 17, 2016

At work, I've been reading through various statutes and requirements to finally identify, once and for all, what we're required to do, IT-wise, in terms of data retention, security, and so forth. This week's reading has been on the State of Nevada's requirements, which has meant browsing through the Nevada Law Library, starting with the Nevada Revised Statutes. While doing so, however, I stumbled across NRS 269.563:

NRS 269.563 Formation of town in area that contains no residents in county whose population is 700,000 or more. 1. The board of county commissioners of a county whose population is 700,000 or more may provide by ordinance for the formation of an unincorporated town in an area that contains no residents if all of the owners of land within the boundaries of the proposed unincorporated town so request in writing. The written request of the owners must include the statement that the owners consent to be taxed for the services to be listed in the ordinance. If any owner withdraws his or her consent before adoption of the ordinance creating the unincorporated town, the owner’s property must be excluded in fixing the boundaries of the town. 2. The ordinance must contain clear designation of the boundaries of the unincorporated town and the boundaries of any area which may be annexed into the unincorporated town, a listing of services to be provided, the number of members to serve on the town advisory board and the conditions that must be satisfied before appointment of the first town advisory board. These conditions may include, without limitation, the number of residents, the level of services being provided and the extent of improvements in place. (Added to NRS by 1995, 2177; A 2011, 1166)

Interestingly, the original 1995 draft had originally limited the statute's applicability to counties with whose population is 400,000 or more; 2010's census, however, revealed there were twosuch counties, so the limit was adjusted upward.

What gives? Why would anyone want to create a town with no residents? And why would such a construct be limited to Clark County?

The answer has a lot to do with Clark County's notoriously hostile relationship with Las Vegas and its reliance on unincorporated townships. CGP Grey's video is as good of start as any - long story short, there's always been a tense relationship between Clark County's government and the governments of the cities within Clark County due to competing tax rates, provision of public services, and so forth. In 1995, a new subdivision was being created - one that was going to explicitly cater to wealthier homeowners. Trouble was, it hadn't been created yet; no roads had been paved and no houses had been built. So, the question became, who would end up providing this new subdivision public services and, in return, collecting tax revenues from its potentially affluent property owners? The developers - the Howard Hughes corporation - didn't want Las Vegas to annex the development; doing so would subject new property owners to higher city property taxes, instead of the significantly lower property taxes enjoyed in unincorporated Clark County. Similarly, Clark County didn't want Las Vegas to annex the development, either, since the development, if it attracted as affluent of a clientele as it desired, would undoubtedly provide quite a bit of tax revenue.

Mr. Mark Brown, Vice President, Howard Hughes Corporation, testified. He stated Howard Hughes Corporation supported S.B. 556. He said, over the past three years, Howard Hughes Corporation had worked with officials from Clark County to plan Summerlin-South and its master plan had recently been approved. He advised Howard Hughes Corporation would be at a major competitive disadvantage and its development of Summerlin-South could be slowed over the upcoming 18 month period if S.B. 556 did not pass. He declared Howard Hughes Corporation believed S.B. 556 was critical to the future development of Summerlin-South.

Mr. Brown stated Howard Hughes Corporation anticipated the next housing boom in Las Vegas would occur at approximately the time the new resorts between Tropicana and Spring Mountain Road were completed and explained, "The southernly access to our property is critical to capturing and providing housing needs for those employees there." He contended if Howard Hughes Corporation was prevented from moving forward with its development it would miss out on the next housing boom and, if that happened, it would cost the company tens of millions of dollars. He urged the committee to support S.B. 556.

Chairman Price asked whether the fact Summerlin-South did or did not become an incorporated town would make a difference in whether or not Howard Hughes Corporation developed Summerlin-South. Mr. Brown replied in would. He indicated Howard Hughes Corporation had drafted the first two sections of S.B. 556 more than a year earlier in order to request a technical change to the law which would allow an unincorporated township to be created without its having any residents. He advised Howard Hughes Corporation did not foresee Clark County would take steps to assist in providing infrastructure and services to an entity which was not generating revenues. He asserted Howard Hughes Corporation could not afford to provide such infrastructure and services without the county's assistance.

In short, the Howard Hughes Corporation wanted to develop Summerlin-South and wanted to do it on Clark County's dime. By creating its own township, any tax revenue generated in Summerlin-South would go toward further development of Summerlin-South, regardless of whether anyone lived there to enjoy the benefits or not.

This goes a long way toward explaining why NRS 269.563 was amended in 2011 and remained amended after Nevada's decennial legislative exercise of shifting population limits in Nevada statutes to reflect current county populations - Washoe County didn't want developers to put it on the hook for providing services to their developments before people moved in.